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Freight Broker Business - Profitable Opportunity In A Huge Industry

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This article is based on a StartingABiz.com interview with Dennis Brown of Freight Broker Boot Camp:

If you'd like to find out how to be a freight broker or freight agent, Dennis Brown is absolutely one of the experts you can go to.

Dennis Brown has been an entrepreneur for more than 20 years. He has owned and operated several businesses including small publishing company, a software development company during the dot com era, and financial services company.

First of all, if you're not familiar with freight brokering business before, you might be wondering what a freight broker or freight agent does daily.

Well, a freight broker and freight agent are actually not the same (we'll discuss it later), but basically has the same role, which is as a middleman.

A freight broker, also known as property broker, logistics broker, truck broker, or load broker, is basically a intermediary or a middle man that helps shippers who are looking for transportation services or trucking companies that actually do the services.

Let's say a company called XYZ Widgets need a shipment picked up in Lancaster, New York, and delivered to one of their customers in Savannah, Georgia.

When XYZ Widgets calls a freight broker to help find a trucking company, and the broker then quotes for example $1,500 after considering the size, weight, and what it needs to pick up and deliver.

The broker then calls a motor carrier that regularly has trucks in the Lancaster area that agrees to go to Savannah and negotiates a price below the cost that was previously quoted ($1,500).

Now for example the broker and the motor carrier both agree with the rate of $1,200. After that, the truck goes and picks up the freight in Lancaster, NY, to deliver it to Savannah, Georgia. It probably takes 2-3 days to get to the destination.

In this process, the freight broker is able to make $200 in gross profit without ever seeing or touching the product. A freight broker makes money by helping the shipper and the carrier to achieve their goals.

So even though freight brokers don't act as either the shipper or motor carrier, they play an active role in moving a cargo.

Freight brokering business is a huge industry. Examples of freight brokerage companies with billions of dollars of revenue include C.H. Robinson, Landstar System, Inc, XPO Logistics, and many more.

But it's not only big guys who can have a successful freight brokerage business. There's a lot of room for the little guys like you in this business, because transportation is always a huge industry anywhere in the world.

For example, the products you own such as computers that you've been working on, your phone, the chair that you're sitting on, etc, everything had to go through a delivery cycle. They went on a truck at some point.

Therefore, the business is very wide and vast, there's a lot of opportunity. This business is domestic-international, import - export. Very big.

As a middleman, a freight broker or freight agent saves time of the shipper. It is because statistically speaking, about 85% of all trucking companies have no more than 6 trucks. That number shows that trucking industry mostly consists of small businesses.

So if you don't have sufficient amount of trucks, you have very restricted ability to completely service a customer. If all your trucks are out and your customer calls, you will have to pass it and give it to another company.

This is where a freight broker plays a role.

The fact is, to find a truck a shipper may have call carriers 10, 20, 30, or even 50 times only to get an available truck. But by calling a broker just once, they don't have to worry about finding the truck anymore as the broker will make the calls for them. XYZ Widgets can then just focus on doing what they do best, which is producing widgets.

Therefore, as a freight broker, your job is to save shippers time and help make the shipper's jobs much easier.

Different from a freight broker, a freight agent is typically someone who handles the daily transactions with the customers, working for or under a freight broker.

While a freight agent doesn't need to have a license, a freight broker is the entity that is licensed by the FMCSA to legally broker freights

How much can you make in this business?

Well, Dennis Brown himself knows agents that make, $10,000 to even $50,000 each month as a freight agent.

Does it take a lot of money to get started?

If you want to spend little to nothing to do this business, you can work for a broker as a freight agent. You can work at home and you can also work from anywhere as long as you have a phone with an Internet connection. This is how a lot of people start.

If you want to learn more about how to become a freight broker or freight agent from Dennis Brown, join his Freight Broker Boot Camp now!